CFOs regain morale … but focus on lowering costs
Daf Mag .Posted on 25/10/2013 by Antoine Pietri.
CFOs’ perception of the economic environment has improved significantly since April, according to a semi-annual study by Deloitte, mainly due to the US and emerging markets. An improvement while cautious on the operational side.
The latest edition of the Deloitte barometer, published Tuesday, October 22, 2013 notes a reversal of trend on the perception of the economic environment by the profession: 24% of them are now optimistic, against only 3% last April ( see our news ). According to Deloitte, this trend is due to consolidation in emerging countries, as well as the improvement of the economic situation in the United States. “This is a real crisis, even if it is slow and measured”, analysis Jean-Paul Betbèze, Economic Advisor at Deloitte.
Cost reductions and organic growth
CFOs remain cautious and say they favor corporate-endogenous actions for the future , such as cutting costs for 58% of them and organic growth for half of them. A point that shows that the renewed optimism of CFOs remains fragile. In the scenario of a cash surplus, CFOs are also inclined to focus on capacity investments at 42%. This preference is significantly higher than in April, when it was 13%. R & D and innovation also remain a priority for one-third of CFOs. Lastly, acquisitions and investments to modernize existing equipment are also favored. Financial managers, on the other hand, remain cautious about investing in financial assets or distributing dividends or repurchasing shares .
BFR at the heart of the concerns
“For financial managers, the economic situation is synonymous with a tension of needs, particularly in terms of WCR and capacity investments, due in particular to the low margins,” said Jean-Paul Berbèze. The way out of the crisis is a multi-faceted shift facing businesses. This turn is to be negotiated very seriously to prepare the exit and the continuity of the activity ”
In terms of cash flow, it is still the management of the WCR which stands out as the main lever for improving cash flow: this is an element on which the company must focus its efforts for 77% of directors interviewed.
The study was conducted with 74 CFOs on a panel of companies with fewer than 500 employees and more than 2,000 employees .